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Australia to Invest A$1 Billion on Domestic Solar Panel Push to Cut Reliance on China

(Bloomberg) -- Australia will invest A$1 billion ($652 million) to ensure more solar panels are made domestically, as the nation looks to reduce its dependence on imports from China.

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The Solar Sunshot program will offer production subsidies and grants to help Australia capture more of the global solar manufacturing supply chain, the government said in a release. While the nation has the highest uptake of rooftop solar in the world — with panels on one in three households — just 1% of those have been made locally, it said.

Australia’s rapid shift away from its aging fleet of coal power stations and massive uptake of household solar has made it a test case for the global energy transition. The new program follows similar moves by countries including the US and India in encouraging local supply, but may still struggle to push out manufacturers from China, which provide more than 90% of Australia’s panels.

“Australia should not be the last link in a global supply chain built on an Australian invention,” Prime Minister Anthony Albanese said in the release, referring to pioneering work on the technology at the University of New South Wales. “We have every metal and critical mineral necessary to be a central player in the net zero transformation, and a proven track record as a reliable energy producer and exporter.”

Albanese on Thursday visited the site of AGL Energy Ltd.’s Liddell coal plant in the Hunter region north of Sydney — which closed last year after more than half a century in a symbol of the transition. AGL signed an agreement with SunDrive, an Australian startup backed by activist billionaire Mike Cannon-Brookes, to explore the development of a solar manufacturing facility on the site, it said in a separate release.

Meanwhile, global solar supply is facing a crisis after the rapid expansion of plants outpaced demand and squeezed margins, Bloomberg NEF said in a report this month. About $78 billion of surplus solar manufacturing capacity could be added through 2027, it said.

--With assistance from Ben Westcott.

(Updates with AGL company release in fifth paragraph)

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